• Fed Chairman Powell made it clear in his press conference that rates will likely have to remain higher for longer to battle stubborn inflation.  
• The tough rhetoric along with September seasonality led most of the major indices to take some steps back, the S&P 500 down a little more than 4% since the start of September after a bounce this week.
• Investors appeared to finally be convinced that the Fed might be serious about the higher-for-longer mantra, causing a sell-off in U.S. Treasuries and equities. 
• Economically, there were some concerns over consumers such as the restart of student loan payments combined with big strikes in Hollywood and the automobile industry. 
• Small Caps have been the weakest by far, having seen a 13% drawdown off the highs that brought it once again around the bear market lows.
• The big concern is whether the Federal Reserve’s tight monetary policy will ultimately lead to a larger economic problem.
• Yet, the consensus is that the Fed will be data-dependent. That likely means it will take time as we await more data over the coming months, data that will hopefully paint a clearer picture of the direction of the economy. 
• The technicals are being tested but so far remain intact. We will be patient and watch our indicators for clues as to how this resolves itself. 

CHURCHILL MANAGEMENT GROUP

Source: Churchill Management Group

info@churchillmanagement.com 

** This report is meant to inform the reader of our current market opinion, which we, as professional money managers, use in our decision-making. It should be noted that stock market and bond market data are subject to varying interpretations and any one interpretation will not necessarily guarantee investment success. The information obtained from the sources specified herein and used as basis for our current market opinion is believed reliable, but we do not guarantee the accuracy of such information.